Malampaya fund audit explosive, says COA | Inquirer News

Malampaya fund audit explosive, says COA

Report on P23.6B fund under Arroyo out in Oct.

SOURCE OF GAS WEALTH The Malampaya gas rig is found 80 kilometers off the shore of northwest Palawan. INQUIRER PHOTO

The woman who in August found the P10-billion pork barrel scandal “appalling” (kahindik-hindik) now says her agency has looked into the alleged misuse of P23.6 billion in the government’s share in the Malampaya Fund during the Arroyo administration and found it “explosive.”

Speaking on Thursday at the Integrity Summit organized by the business community, Commission on Audit (COA) Chair Grace Pulido-Tan said her agency would release the results of a special audit of the Malampaya Fund next month.


“In October, we will come up with the results of the audit on the Malampaya Fund. Let this serve as a heads-up,” Tan said. “The results will be explosive.”

Agrarian Reform Secretary Virgilio de los Reyes told the Inquirer on Thursday that an in-house review showed that P900 million from the operation of gas and oil fields in the waters off Palawan province coursed through his department in 2009 went to ghost projects of businesswoman Janet Lim-Napoles.


The Department of Agrarian Reform (DAR) component is included in the COA special audit.

The Malampaya Fund is a pool of money from royalties collected by the national government from the Malampaya gas project in Palawan province. It is meant primarily to fund the government’s energy-related projects as well as other programs approved by the President.

De los Reyes said that the P900 million meant for victims of Tropical Storms “Ondoy” and “Pepeng” in 2009 in agrarian reform communities in 97 municipalities had gone instead to Napoles’ 12 NGOs.

Ministerial role

“Our audit showed that the mayors denied having received any fund from the NGOs (nongovernment organizations). Some beneficiaries denied having received any livelihood packages while some names in the liquidation report were fake,” he said in a phone interview.

De los Reyes said, however, that the audit failed to trace the government official who identified the Napoles NGOs as the recipients of the Malampaya Fund coursed through the DAR. DAR employees claimed that the agency’s role was merely “ministerial” and that they had no part in the selection of the implementing NGO.

The key players in the fund transfer were then Agrarian Reform Secretary Nasser Pangandaman and Undersecretary Narciso Nieto and then Budget Secretary Rolando Andaya and incumbent Budget Undersecretary Mario Relampagos.


Napoles is among 38 people, including Senators Juan Ponce Enrile, Jinggoy Estrada and Ramon Revilla Jr., charged in the Office of the Ombudsman on Monday with plunder and malversation. Napoles is being held in a police antiterrorism training camp for serious illegal detention of Benhur Luy, a whistle-blower.

Arroyo set ball rolling

Former President Gloria Macapagal-Arroyo approved the use of the Malampaya Fund for typhoon rehabilitation, which was formalized by the then executive secretary, Eduardo Ermita, in a memo to Andaya, that started the ball rolling on the plunder of the facility.

Based on the liquidation report, the 12 NGOs listed a total of 22,427 beneficiaries who were given farm production kits priced either at P38,118 or P42,358 each in 97 towns in the provinces of Ilocos Norte, Ilocos Sur, Bulacan, Benguet, Abra, Laguna,  Kalinga, La Union, Pangasinan, Isabela, Cagayan, Ifugao, Tarlac, Quirino, Apayao, Quezon Nueva Vizcaya and Camarines Sur.

In Baguio City, Franklin Cocoy, DAR Cordillera director, said his office had so far found no trace of the livelihood aid program financed by Malampaya.

“A former mayor approached us last year to determine whether Malampaya-funded projects meant for her town existed. She was asked by the Commission on Audit to validate the release of Pepeng-related items which she did not receive,” Cocoy said on Thursday.

Some mayors, who spoke to the Inquirer on condition of anonymity, said each of them was asked to confirm the release of P10 million worth of farm tools. But they said none of these items reached their towns.

Bill for independent COA

Taking note of the mayors’ complaints, Cocoy said the agency launched an investigation and was attempting to verify a report that Napoles had used her NGOs to gain access to the Malampaya projects.

During the integrity summit on Thursday, Tan announced she was pushing for the passage of a bill that sought to make the COA an independent agency.

She said she was proposing that the COA have its budget automatically appropriated and not go through the approval mechanism in Congress. She said this would prevent auditors from being subjected to unfavorable treatment by legislators, particularly those implicated in irregularities.

“In other countries the budget of the audit office is already there [automatically appropriated]. That is one way by which the independence of COA can be guaranteed,” Tan said. “At present, our budget process is very difficult.”

She said that under the current system, COA officials were often subjected to questioning by legislators about matters not related to its budget. “If our budget is assured, we can get rid of politics,” she said.  –With reports from Vincent Cabreza and Kim Quitasol, Inquirer Northern Luzon

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TAGS: Arroyo administration, Commission On Audit, Malampaya audit, Malampaya fund
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